Cuba Buys Beans From Everyone But Us
August 01, 2001
By John Parker
Retired USDA Market Specialist
Editors note: John Parker, a former USDA ag economist and now a private dry bean market analyst, spoke at Bean Day 2000. His latest analysis of the Cuban bean market follows:
Cuba was the leading Caribbean importer of pulses and peas in recent years. Also, Cuba rivaled Brazil as the top importer of pulses in the Western Hemisphere.
Mexico was a larger importer of dry beans in 1998 and 1999 than Cuba, although imports by both countries were similar in 2000. Since Cuba has been a larger importer of dry peas in recent years than Mexico and Brazil, it has a high ranking for the quantity of all pulses imported.
A world shortage of meat and dairy products has exacerbated Cubas imports of pulses. Cuban consumers, who rely on this inexpensive source of food high in protein, have welcomed imports of dry beans and peas at reasonable prices. Cubas rebound for imports of dry beans from China in 2000 apparently caused a reduction of purchases of Canadian dry peas, which peaked in 1999. Canada and China were the main suppliers of Cubas pulse imports, which rose to about 263,000 tons in 1999.
Canada top supplier
Canadas exports of dry peas and beans to Cuba were at a slower pace in early 2000 than the peak deliveries of 1999. Except for the return of China as a larger supplier of kidney beans, there is not a good explanation of why the upward trend for Canadian pulse exports to Cuba did not continue in 2000. There was a dramatic climb in the value for Canadas exports of pulses to Cuba from $7.3 million in 1995 to $55.3 million during calendar 1999. Canada exported 182,972 tons of dry peas to Cuba, valued at $38.2 million, compared to 106,320 tons at $24.7 million in 1998.
Canadas dry bean exports to Cuba doubled in 1999, reaching 27,709 tons compared with 12,389 tons in 1998 and a token 298 tons in 1997. The average export price for Canadas dry bean shipments to Cuba fell from $625 per metric ton in 1998 to $564 per ton in 1999.
China resumes shipments
Chinas exports of dry beans to Cuba peaked at 99,031 tons in 1997, stopped in 1998 and were only 987 tons in 1999. The average price for Chinas exports of dry beans to Cuba rose from $350 per ton in 1995 to $408 per ton in 1997.
As Cuba found it difficult to obtain dry beans from other sources at reasonable prices, a return to China for kidney beans occurred in 2000. For all of 2000, it is likely that the quantity of kidney beans exported by China to Cuba will be back up near the 1997 peak. Shipments during the first nine months of 2000 had rebounded to 68,483 tons.
China was an important customer for Cuban sugar and nickel during 1990-1997. Chinas shift to more cash transactions in foreign trade and less involvement in barter through trade agreements appears to have upset the deliveries of dry beans to Cuba in 1997 and 1998. The resumption of substantial bean shipments to Cuba in 2000 may have been assisted by innovative banking in China and Hong Kong to show some flexibility in financing exports of dry beans to Cuba.
Although some restrictions on U.S. exports of food to Cuba have been lifted, some barriers remain. While Cuba has large cash inflows from remittances sent back home by Cubans living in the United States, a shortage of foreign exchange hampers expected commercial sales of U.S. beans.
The steep decline for imported dry beans was partly offset by rising imports of less costly peas in 1998 and 1999.
New sources scarce
Total Cuban imports of dry beans were down in 1998 because of problems in obtaining the traditional types of kidney beans from China. Apparently, there were few potential dry bean suppliers seeking to replace China in 1998 or 1999. Argentina was the only country to emerge as a partial replacement for Chinas lacking deliveries in 1999. Because of the hurdles in getting appropriate bank payments, exporters tend to arrange sales of relatively high quality beans to Cuba.
Chile exported 147 tons of beans to Cuba for $98,000 in 1997 but the price for 20 tons shipped in 1998 was $1,000 per ton. Brazil exported 296 tons to Cuba in 1997 for $124,000 but the price for 66 tons provided in 1998 was up to $510 per ton.
Mexicos exports of dry beans to Cuba declined from 758 tons in 1996 to 109 tons in 1997. Mexico sold out its old stocks of beans mostly to Brazil, which was able to pay cash. In 1998, Cuba lost out on chances to buy beans at low prices in various places because of banking and foreign exchange complications. This means that Cuba has been a customer of secondary importance for exporters of dry beans in Argentina, Chile and Central America.
Hurricane Mitch left countries in Central America with a need for greater dry bean imports. This meant that their small exports to Cuba, which had occurred during 1996-1998, temporarily ended in 1999. Honduras exported a token 21 tons of beans to Cuba in 1998. Costa Rica had exported 80 tons of beans to Cuba in 1996, but none in other years of the late 1990s.
Nicaragua exported 1,013 tons of beans to Cuba in 1995, but made no significant deliveries during 1996-1999.
Argentinas shipments of dry beans to Cuba soared from 191 tons in 1998 to 27,788 tons in 1999. Spains exports of dry beans to Cuba dropped from 611 tons in 1998 to 301 tons. Dutch transit traders shipped 611,000 tons of dry beans to Cuba in 1998, but only half that quantity in 1999.
For about a decade through 1997, kidney beans from China became an important part of the Cuban diet. Other suppliers did not fill the lack of deliveries from China in 1998 and 1999. This appears to explain the strong rebound for Chinas deliveries in 2000.
Cuba was a leading customer for Chinas exports of kidney beans during 1991-1997. Chinas exports of kidney beans rose from 41,984 tons in 1992 to a peak of 77,878 tons in 1993 and were steady at 72,558 tons in 1996 before climbing to the 1997 peak. The value for Chinas exports of kidney beans to Cuba increased to about $28 million in 1996, double the 1992-1994 average. The peak value for Chinas dry bean deliveries was in 1997 at $40.4 million.
China eliminated the 13% export bonus for dry beans and some other commodities on July 1, 1995. This caused the export price for kidney beans to rise. Cuba did not have much success in finding suppliers of beans in 1998 and 1999 for less than $4,000 per ton to take the place of China.
Recently, China tended to seek foreign customers who pay cash as a first priority. This means that high prices paid by Japan and other countries in 1998 limited supplies of dry beans available for export to Cuba.
Chinas total exports of kidney beans plummeted from 491,389 tons in 1994 to 269,683 tons in 1996. The share going to Cuba rose from 14% in 1994 to 27% in 1992 as sales to Cuba rose while exports to Africa declined.
Cuba produces only about 18,000 tons of beans annually. Many foods in Cuba include dry beans. They range from chili to bean soup. A shift to more pea soup and stews apparently occurred in 1998 and 1999. Cuba may import about 450,000 tons of pulses in 2001. Dry beans may account for a third to half the total pulse imports in the coming year. The lower price for imported dry peas may be attractive, but many Cuban consumers prefer beans.
Cuba has imported small quantities of dry beans from about a dozen countries in addition to China, Canada and Argentina. The opportunity for dry bean exports from Peru or Ecuador to Cuba is good if the price is attractive. Cuba also is a good potential market for canned beans. Large cans of beans would be welcome by food aid agencies and the soup kitchens operated by international donor agencies.
Because demand for beans and bean products is usually greater than available supplies, opportunities for exports from many countries should be favorable.